We are seeing more family foundations committing their assets (both endowment and “payout”) to impact investing, regardless of asset size. The reasons are multiple and depend on the family, but we are starting to notice some trends.

Checks landing in the mailboxes of nonprofit organizations with foundation return ad-dresses have long been considered philanthropy’s most important currency. Reflecting that view, family foundations have tended to focus their operations, self-image, and their very reasons for being on getting the dollars out the door...Lurking behind that 90 percent, though, is another story—it’s the natural tendency to conflate family governance of a foundation and strategic control of its mission with control of the grantmaking function.

The recent downturn in the stock market has raised concerns among many in the family foundation world. To help put the recent decline in perspective, we offer the following guest post from Richard Marker, co-principal of Wise Philanthropy, offering important lessons from past wild swings for those who work in the foundation world.

A sure-fire indicator that we all make mistakes was the capacity crowd at the National Forum on Family Philanthropy workshop in Seattle entitled, “The Best Mistakes We Ever Made.” Using a rapid-fire format, each of ten speakers took three minutes to share a mistake they made in their family philanthropy experience. To set the context, each speaker explained the goal and framework by responding to, “What were you trying to do”? Next they explained, “What happened that was unexpected – in other words, what went wrong?” Finally, and most importantly, we asked the mistake-makers to share, “What did you learn from your mistake?” In other words, how did the foundation changes its practices as a result?

John Hawkins, a board member and great-grandson of Surdna’s founder John E. Andrus, discusses the evolution of the Surdna board’s thinking on impact investing. Hawkins describes the contours leading to the board’s eventual embrace of a PRI fund and the how the family’s values informed that decision.

Mission investments are made by foundations and other mission-based organizations to further their philanthropic goals. Mission investments (like impact investments) are intended and designed to generate both a measurable social or environmental benefit and a financial return.

Editor’s Note: Impact investing is of growing interest to the many thousands of philanthropic families around the world who manage their philanthropy through family foundations and family offices. In this month’s edition of Family Giving News, we present practical solutions and advice regarding one of...